Antitrust, investigation launched into expensive Sicily flights at Christmas

Register increases of up to +700% for Milan Catania

The Antitrust has launched an investigation against Ryanair, Wizz Air, Easyjet and Ita to ascertain the existence of violations of article 101 TFEU, which prohibits any agreement between companies, decisions of business associations and concerted practices that affect the trade between EU countries which could prevent, limit or distort competition. The investigation was initiated following a report by Codacons which denounced alleged distortions of competition deriving from the increase in the prices of airline tickets on the connecting routes between the main Italian cities (Rome, Bologna, Turin and Milan) and Sicily in correspondence with the holiday season.

Ryanair, Ita Airways, Wizz Air and EasyJet, the Authority recalled, are the main airlines that offer national air transport services to Sicily, with the number of frequencies operated which varies from route to route but which, with reference to the most relevant flights (such as Milan/Palermo and Milan/Catania and Rome/Palermo, and Rome/Catania), can reach a total of up to 20 daily flights per leg (“v/d”). In particular, in the light of the data that can be obtained from the platforms of the Signaled, for the Milan/Catania route, the maximum offer of Ita is 7 v/d, that of Ryanair of 6 v/d, that of EasyJet of 5 v/d and that of Wizz Air 3 v/g; for the Rome/Catania route, Italy’s maximum offer is 7 v/d and Ryanair’s is 5 v/d. The only routes where all four companies are present are the Milan/Catania and the Milan/Palermo.

From the monitoring carried out by the Antitrust to verify the trend in the prices of the airline tickets of the carriers, it emerged that “close to the Christmas holidays, there is a general and substantial increase in the prices of the airline tickets. For example, the average flight price from Milan (Mpx, Lin, Bgy) to Catania and Palermo is 201 euros, over 700% of the price recorded in the period following the holidays, equal to around 28 euros, despite this being a route with a high intensity of daily flights (over 20), offered by four operators. Only some routes, even in the extreme vicinity of holidays, resist the dynamics of the general increase in prices. Furthermore, especially with reference to the routes departing from Milan and the total price of the entire outward journey and back, there is a substantial alignment of the prices charged by the various companies”.

In the present case, underlines the Antitrust, “it is believed that the increase in the price of air tickets during the Christmas period could be the result of collusive behavior between the air carriers, possibly facilitated by the use of price algorithms, rather than a rational adaptation to market conditions.In fact, on the one hand, it seems in some cases (for example, on routes departing from Milan and arriving in Catania or Palermo) that there is an anomalous alignment of prices, a possible indicator of an agreement between the operators active on the connections between mainland Italy and the two main Sicilian cities; on the other hand, there are no initiatives by air carriers to take measures aimed at obtaining a better adaptation of supply to demand, which would also be consistent with a profit maximization strategy.

Therefore, the Authority observes, “it is believed that what has been reported deserves further investigation, in order to ascertain the existence of possible distortions of the correct functioning of the competitive mechanisms, in violation of article 101 TFEU. Such distortions, as they affect an economic variable of particular importance, such as the price, would be particularly serious, especially in the current phase of crisis, of difficulties for consumers and the reduction of the purchasing power of household incomes”.

The Antitrust has resolved “to set a term of sixty days, starting from the date of notification of this provision, for the exercise by the legal representatives of the Parties, or persons delegated by them, of the right to be heard”.